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Draghi says ECB ready to restore credit to Greek banks if creditor agreement in sight

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FRANKFURT, Germany — The head of the European Central Bank said it stands ready to restore support for Greece's banks if talks between the Greek government and its creditors get back on track.

Mario Draghi told EU lawmakers Monday that the parties should "restore the policy dialogue" so talks can could yield "a credible perspective" for a deal on more emergency aid.

PHOTO: European Central Bank Governor Mario Draghi arrives for an Economic Affairs Committee meeting at the European Parliament in Brussels on Monday, March 23, 2015. Draghi presented the ECB's perspective on economic and monetary developments. (AP Photo/Geert Vanden Wijngaert)
European Central Bank Governor Mario Draghi arrives for an Economic Affairs Committee meeting at the European Parliament in Brussels on Monday, March 23, 2015. Draghi presented the ECB's perspective on economic and monetary developments. (AP Photo/Geert Vanden Wijngaert)

Greece and its creditors in the 19-country eurozone have sparred over the conditions Greece needs to fulfill to get more help to avoid defaulting on its debts. Greek Prime Minister Alexis Tsipras met German Chancellor Angela Merkel to try to break the logjam.

Once a deal is in sight, Draghi said the ECB could restore the ability for Greek banks to tap ECB credit using Greek government bonds as collateral. Being able to use the bonds is an important source of funding to help keep Greece's financial system afloat. For now, Greek banks have been forced to borrow at higher costs from the Greek central bank.

Draghi rejected a comment from one lawmaker that the ECB was "blackmailing" Greece into yielding to creditor conditions. He noted that the ECB held 104 billion euros ($124 billion) of credit exposure to Greece. "What kind of blackmail is this?" he said, calling the statement "a bit rich."

"We are not creating rules for Greece... we are simply observing existing rules."

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PHOTO: European Central Bank Governor Mario Draghi talks during an Economic Affairs Committee meeting at the European Parliament in Brussels on Monday, March 23, 2015.  Draghi presented the ECB's perspective on economic and monetary developments. (AP Photo/Geert Vanden Wijngaert)
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